CHATTANOOGA, Tenn.--(BUSINESS WIRE)--First Security Group, Inc. (NASDAQ: FSGI) today reported a net loss allocated to common shareholders of $1.4 million, or $0.02 per basic and diluted share, for the third quarter of 2013 as compared to a loss of $9.4 million, or $5.79 per basic and diluted share, for the same period in 2012. For the nine months ended September 30, 2013, First Security reported net income available to common shareholders of $12.0 million, or $0.30 per basic and diluted share, as compared to a $23.5 million loss, of $14.54 per basic and diluted share, for the same period in 2012.
“The third quarter represents the first full quarter after the April recapitalization,” said Michael Kramer, First Security’s President and Chief Executive Officer. “While we are pleased with our continued improvement in our deposit mix and associated cost, it is essential that we achieve significant improvement in loan and revenue growth.”
For the third quarter of 2013, net interest income improved by $679 thousand, or 12.4%, to $6.2 million compared to $5.5 million for the linked second quarter of 2013. Total interest income contributed an additional $386 thousand during the third quarter as First Security reduced cash and invested in higher yielding investment securities. Total interest expense declined by $293 thousand through reductions in the costs of deposits as well as reductions in total deposits.
During the third quarter, First Security continued to improve its deposit mix by increasing pure deposits, defined as transaction-based accounts, while reducing higher cost customer CDs as well as reducing brokered CDs as they matured with available cash. During the third quarter, average pure deposits increased by $22.4 million, or 5.2% (20.7% annualized) to $454.4 million while customer CDs and brokered CDs decreased by $61.0 million, or 11.6% (46.3% annualized). As of September 30, 2013, pure deposits totaled 50.0% of total deposits as compared to 39.6% as of September 30, 2012. The changes in deposit mix resulted in the average rate paid on customer deposits improving from 0.64% to 0.57% and the overall cost of deposits improving from 0.96% to 0.86% comparing the second and third quarters of 2013.
With continued asset quality improvement and minimal charge-offs, First Security recorded a $1.6 million negative provision to the allowance for loan and lease losses for the quarter and a $1.8 million negative provision for the year. First Security realized net recoveries of $32 thousand during the third quarter of 2013 and $1.3 million in net charge-offs for the year to date period. Nonaccrual loans declined by $1.8 million to $6.8 million as of September 30, 2013 compared to $8.6 million as of June 30, 2013. Nonperforming loans to total loans improved to 1.37% as of September 30, 2013 as compared to 1.65% as of June 30, 2013. Based on the continued improvement in asset quality and minimal charge-offs, the negative provision was appropriate to reduce the allowance to total loans from 2.27% as of June 30, 2013 to 2.00% as of September 30, 2013.
Non-interest income remained consistent quarter-over-quarter at $2.5 million. Non-interest expense decreased by $1.5 million to $11.4 million for the third quarter of 2013 as compared to the second quarter of 2013. During the third quarter, First Security announced the pending consolidations of two branches to be completed by December 31, 2013 as well as an overall 10% reduction in full-time equivalent employees. The associated cost savings with the reduced workforce is approximately $2.2 million in salary and benefits annually with full realization to begin in the first quarter of 2014. Various other cost saving are anticipated to further reduce non-expense expense for 2014.
“Over the last several quarters, we have seen significant pricing and credit concessions from the competition that has inhibited our ability to grow loans with the quality and yields that we seek,” said John Haddock, First Security’s EVP and Chief Financial Officer. “At the same time, we have been evaluating certain niche lending initiatives and have begun to implement four distinct initiatives to offset the impact of these competitive pressures.”
First Security has announced the implementation of four niche lending opportunities. First, Tri-Net Direct is a new division focused on national net lease lending and includes three full-time employees. Tri-Net will originate construction of preleased “build to suit” projects and provide interim and long term financing to professional developers and private investors for commercial real estate on long term lease to tenants that are investment grade or have investment grade attributes. Second, First Security has partnered with a third-party that originates small balance, unsecured consumer loans, primarily associated with home improvement projects. Third, First Security has built an asset-based lending unit to serve as a community bank alternative for asset-based lending within our markets that should generate above average return on a risk-adjusted basis. The fourth initiative is a dedicated team focused on originating and selling government guaranteed loans, including SBA and USDA loan products.
“Our ability to supplement the lending activities of our traditional bankers with the niche lending initiatives should significantly enhance our ability to achieve our desired loan growth while providing value added services to our customers,” said CEO Kramer. “The return to core profitability is predominantly associated with our ability to increase loans and change our mix of earning assets.”
About First Security Group, Inc.
First Security Group, Inc. is a bank holding company headquartered in Chattanooga, Tennessee, with $1.0 billion in assets. Founded in 1999, First Security’s community bank subsidiary, FSGBank, N.A. has 30 full-service banking offices along the interstate corridors of eastern and middle Tennessee and northern Georgia. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. FSGBank provides retail and commercial banking services, trust and investment management, mortgage banking, financial planning, internet banking (www.FSGBank.com).
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America (GAAP). First Security’s management uses these “non-GAAP” measures in its analysis of First Security’s performance. Non-GAAP measures typically adjust GAAP performance measures to exclude the effects of charges, expenses and gains related to the consummation of mergers and acquisitions, and costs related to the integration of merged entities. These non- GAAP measures may also exclude other significant gains, losses or expenses that are unusual in nature and not expected to recur. Since these items and their impact on First Security’s performance are difficult to predict, management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of First Security’s core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Forward-Looking Statements
This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1993) that are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements include, among others, an estimated goodwill impairment charge and the assumptions underlying this estimate. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by First Security with the Securities and Exchange Commission. First Security undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
Public companies, from time to time, become aware of rumors concerning their business. Investors are cautioned that in this age of instant communication and internet access, it may be important to avoid relying on rumors and unsubstantiated information. First Security complies with Federal and State law applicable to disclosure of information. Investors may be at significant risk in relying on unsubstantiated information from other sources.
| First Security Group, Inc. and Subsidiary | ||||||||||||||||||||||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | Year-to-Date | Year-to-date | ||||||||||||||||||||||||||||||
| 2013 | 2013 | 2013 | 2012 | 2012 | Sept. 30, 2013 | Sept. 30, 2012 | ||||||||||||||||||||||||||||||
| (in thousands, except per share amounts and full-time equivalent employees) | ||||||||||||||||||||||||||||||||||||
| Earnings: | ||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 6,165 | $ | 5,486 | $ | 5,241 | $ | 5,191 | $ | 5,849 | $ | 16,893 | $ | 18,389 | ||||||||||||||||||||||
| (Credit) Provision for loan and lease losses | $ | (1,632 | ) | $ | (826 | ) | $ | 678 | $ | 10,374 | $ | 4,543 | $ | (1,780 | ) | $ | 10,492 | |||||||||||||||||||
| Non-interest income | $ | 2,514 | $ | 2,521 | $ | 2,220 | $ | 2,306 | $ | 2,694 | $ | 7,255 | $ | 6,989 | ||||||||||||||||||||||
| Non-interest expense | $ | 11,419 | $ | 12,909 | $ | 14,042 | $ | 11,528 | $ | 12,781 | $ | 38,372 | $ | 37,280 | ||||||||||||||||||||||
| Dividends and accretion on preferred stock | $ | — | $ | 858 | $ | 524 | $ | 522 | $ | 521 | $ | 1,381 | $ | 1,556 | ||||||||||||||||||||||
| Effect of exchange on preferred stock to common stock | $ | — | $ | 26,179 | $ | — | $ | — | $ | — | $ | 26,179 | $ | — | ||||||||||||||||||||||
| Net (loss allocated) income available to common stockholders | $ | (1,430 | ) | $ | 21,328 | $ | (7,902 | ) | $ | (16,100 | ) | $ | (9,410 | ) | $ | 11,996 | $ | (23,548 | ) | |||||||||||||||||
| Per Share Data: | ||||||||||||||||||||||||||||||||||||
| Net (loss allocated) income available to common stockholders, basic | $ | (0.02 | ) | $ | 0.39 | $ | (4.90 | ) | $ | (9.90 | ) | $ | (5.79 | ) | $ | 0.30 | $ | (14.54 | ) | |||||||||||||||||
| Net (loss allocated) income available to common stockholders, diluted | $ | (0.02 | ) | $ | 0.39 | $ | (4.90 | ) | $ | (9.90 | ) | $ | (5.79 | ) | $ | 0.30 | $ | (14.54 | ) | |||||||||||||||||
| Book value per common share | $ | 1.25 | $ | 1.39 | $ | (6.58 | ) | $ | (1.94 | ) | $ | 6.93 | $ | 1.25 | $ | 6.93 | ||||||||||||||||||||
| Performance Ratios: | ||||||||||||||||||||||||||||||||||||
| Return on average assets | (0.56 | )% | 7.97 | % | (3.02 | )% | (5.91 | )% | (3.37 | )% | 1.52 | % | (2.81 | )% | ||||||||||||||||||||||
| Return on average common equity | (7.21 | )% | 95.78 | % | NM | NM | (189.98 | )% | 29.77 | % | (113.56 | )% | ||||||||||||||||||||||||
| Efficiency ratio | 131.57 | % | 161.22 | % | 188.21 | % | 153.77 | % | 149.61 | % | 158.90 | % | 146.90 | % | ||||||||||||||||||||||
| Non-interest income to net interest income and non-interest income | 28.97 | % | 31.48 | % | 29.75 | % | 30.76 | % | 31.53 | % | 30.04 | % | 27.54 | % | ||||||||||||||||||||||
| Capital: | ||||||||||||||||||||||||||||||||||||
| Total equity to total assets | 8.24 | % | 8.12 | % | 2.02 | % | 2.74 | % | 4.00 | % | 8.24 | % | 4.00 | % | ||||||||||||||||||||||
| Liquidity, Yields and Rates: | ||||||||||||||||||||||||||||||||||||
| Interest-bearing cash - average balance | 68,964 | 122,499 | 156,117 | 179,116 | 187,248 | 137,291 | 201,663 | |||||||||||||||||||||||||||||
| Investment securities - average balance | 329,385 | 322,747 | 253,265 | 252,356 | 254,362 | 291,698 | 233,670 | |||||||||||||||||||||||||||||
| Loans - average balance | 529,406 | 547,499 | 554,204 | 574,768 | 593,164 | 544,136 | 595,278 | |||||||||||||||||||||||||||||
| Average Earning Assets | 927,755 | 992,745 | 963,586 | 1,006,240 | 1,034,774 | 973,125 | 1,030,611 | |||||||||||||||||||||||||||||
| Pure deposits1 - average balance | 454,379 | 431,988 | 414,244 | 408,804 | 409,810 | 428,826 | 394,101 | |||||||||||||||||||||||||||||
| Core deposits2 - average balance | 653,044 | 648,373 | 639,558 | 640,328 | 642,426 | 646,062 | 625,791 | |||||||||||||||||||||||||||||
| Customer deposits3 - average balance | 829,926 | 847,007 | 839,307 | 845,346 | 843,317 | 842,066 | 823,595 | |||||||||||||||||||||||||||||
| Brokered deposits - average balance | 90,323 | 111,801 | 153,741 | 178,876 | 193,245 | 125,299 | 205,028 | |||||||||||||||||||||||||||||
| Total deposits - average balance | 920,249 | 958,808 | 993,048 | 1,024,222 | 1,036,562 | 967,365 | 1,028,623 | |||||||||||||||||||||||||||||
| Total loans to total deposits | 58.76 | % | 56.59 | % | 54.53 | % | 53.68 | % | 54.91 | % | 58.76 | % | 54.91 | % | ||||||||||||||||||||||
| Yield on earning assets | 3.57 | % | 3.20 | % | 3.33 | % | 3.63 | % | 3.50 | % | 3.32 | % | 3.72 | % | ||||||||||||||||||||||
| Rate on customer deposits (including impact of non-interest bearing DDAs) | 0.57 | % | 0.64 | % | 0.68 | % | 0.70 | % | 0.75 | % | 0.63 | % | 0.81 | % | ||||||||||||||||||||||
| Cost of deposits | 0.86 | % | 0.96 | % | 1.04 | % | 1.09 | % | 1.15 | % | 0.94 | % | 1.24 | % | ||||||||||||||||||||||
| Rate on interest-bearing funding | 1.01 | % | 1.11 | % | 1.20 | % | 1.30 | % | 1.40 | % | 1.09 | % | 1.49 | % | ||||||||||||||||||||||
| Net interest margin, taxable equivalent | 2.71 | % | 2.27 | % | 2.25 | % | 2.49 | % | 2.30 | % | 2.38 | % | 2.44 | % | ||||||||||||||||||||||
| Asset Quality: | ||||||||||||||||||||||||||||||||||||
| Net (recoveries) charge-offs | $ | (32 | ) | $ | 374 | $ | 978 | $ | 14,064 | $ | 6,653 | $ | 1,320 | $ | 12,602 | |||||||||||||||||||||
| Net loan (recoveries) charged-offs to average loans, annualized | (0.02 | )% | 0.27 | % | 0.71 | % | 9.79 | % | 4.49 | % | 0.32 | % | 2.83 | % | ||||||||||||||||||||||
| Non-accrual loans | $ | 6,803 | $ | 8,628 | $ | 10,194 | $ | 25,071 | $ | 32,254 | $ | 6,803 | $ | 32,254 | ||||||||||||||||||||||
| Other real estate owned and repossessed assets, net | $ | 8,678 | $ | 10,549 | $ | 12,722 | $ | 13,449 | $ | 15,854 | $ | 8,678 | $ | 15,854 | ||||||||||||||||||||||
| Loans 90 days past due | $ | 509 | $ | 332 | $ | 1,270 | $ | 1,656 | $ | 2,572 | $ | 509 | $ | 2,572 | ||||||||||||||||||||||
| Non-performing assets (NPA) | $ | 15,990 | $ | 19,509 | $ | 24,186 | $ | 40,176 | $ | 50,680 | $ | 15,990 | $ | 50,680 | ||||||||||||||||||||||
| NPA to total assets | 1.58 | % | 1.83 | % | 2.32 | % | 3.78 | % | 4.54 | % | 1.58 | % | 4.54 | % | ||||||||||||||||||||||
| Non-performing loans (NPL) | $ | 7,312 | $ | 8,960 | $ | 11,464 | $ | 26,727 | $ | 34,826 | $ | 7,312 | $ | 34,826 | ||||||||||||||||||||||
| NPL to total loans | 1.37 | % | 1.65 | % | 2.12 | % | 4.94 | % | 6.07 | % | 1.37 | % | 6.07 | % | ||||||||||||||||||||||
| Allowance for loan and lease losses to total loans | 2.00 | % | 2.27 | % | 2.50 | % | 2.55 | % | 3.05 | % | 2.00 | % | 3.05 | % | ||||||||||||||||||||||
| Allowance for loan and lease losses to NPL | 146.33 | % | 137.28 | % | 117.76 | % | 51.63 | % | 50.22 | % | 146.33 | % | 50.22 | % | ||||||||||||||||||||||
| Period End Balances: | ||||||||||||||||||||||||||||||||||||
| Loans | $ | 534,627 | $ | 542,019 | $ | 540,288 | $ | 541,130 | $ | 573,365 | $ | 534,627 | $ | 573,365 | ||||||||||||||||||||||
| Allowance for loan and lease losses | $ | 10,700 | $ | 12,300 | $ | 13,500 | $ | 13,800 | $ | 17,490 | $ | 10,700 | $ | 17,490 | ||||||||||||||||||||||
| Intangible assets | $ | 388 | $ | 455 | $ | 526 | $ | 600 | $ | 677 | $ | 388 | $ | 677 | ||||||||||||||||||||||
| Assets | $ | 1,011,855 | $ | 1,066,649 | $ | 1,040,753 | $ | 1,063,555 | $ | 1,117,470 | $ | 1,011,855 | $ | 1,117,470 | ||||||||||||||||||||||
| Total deposits | $ | 909,848 | $ | 957,811 | $ | 990,894 | $ | 1,008,066 | $ | 1,044,131 | $ | 909,848 | $ | 1,044,131 | ||||||||||||||||||||||
| Common stockholders' equity | $ | 83,388 | $ | 86,654 | $ | (11,666 | ) | $ | (3,439 | ) | $ | 12,283 | $ | 83,388 | $ | 12,283 | ||||||||||||||||||||
| Total stockholders' equity | $ | 83,388 | $ | 86,654 | $ | 20,994 | $ | 29,110 | $ | 44,722 | $ | 83,388 | $ | 44,722 | ||||||||||||||||||||||
| Common stock market capitalization | $ | 138,534 | $ | 135,469 | $ | 4,678 | $ | 3,952 | $ | 3,987 | $ | 138,534 | $ | 3,987 | ||||||||||||||||||||||
| Full-time equivalent employees | 313 | 327 | 325 | 329 | 328 | 313 | 328 | |||||||||||||||||||||||||||||
| Common shares outstanding | 66,603 | 62,428 | 1,772 | 1,772 | 1,772 | 66,603 | 1,772 | |||||||||||||||||||||||||||||
| Average Balances: | ||||||||||||||||||||||||||||||||||||
| Loans | $ | 529,406 | $ | 547,499 | $ | 554,204 | $ | 574,768 | $ | 593,164 | $ | 544,136 | $ | 595,278 | ||||||||||||||||||||||
| Intangible assets | $ | 405 | $ | 476 | $ | 574 | $ | 649 | $ | 726 | $ | 501 | $ | 825 | ||||||||||||||||||||||
| Earning assets | $ | 927,755 | $ | 992,745 | $ | 963,586 | $ | 1,006,240 | $ | 1,034,774 | $ | 973,125 | $ | 1,030,611 | ||||||||||||||||||||||
| Assets | $ | 1,016,919 | $ | 1,070,895 | $ | 1,047,184 | $ | 1,089,841 | $ | 1,117,494 | $ | 1,055,611 | $ | 1,117,831 | ||||||||||||||||||||||
| Deposits | $ | 920,249 | $ | 958,808 | $ | 993,048 | $ | 1,024,222 | $ | 1,036,562 | $ | 967,365 | $ | 1,028,623 | ||||||||||||||||||||||
| Common stockholders' equity | $ | 79,382 | $ | 89,069 | $ | (5,402 | ) | $ | 10,108 | $ | 19,813 | $ | 53,720 | $ | 27,648 | |||||||||||||||||||||
| Total stockholders' equity | $ | 79,382 | $ | 92,658 | $ | 27,184 | $ | 42,584 | $ | 52,181 | $ | 65,659 | $ | 59,910 | ||||||||||||||||||||||
| Common shares outstanding, basic - wtd | 62,600 | 55,174 | 1,613 | 1,626 | 1,626 | 40,020 | 1,619 | |||||||||||||||||||||||||||||
| Common shares outstanding, diluted - wtd | 62,600 | 55,176 | 1,613 | 1,626 | 1,626 | 40,020 | 1,619 | |||||||||||||||||||||||||||||
| (1) Pure Deposits are all transaction-based accounts, including non-interest bearing DDA's, interest bearing DDA's, money market accounts and savings accounts. | ||||||||||||||||||||||||||||||||||||
| (2) Core deposits are Pure deposits plus customer certificates of deposits less than $100,000. | ||||||||||||||||||||||||||||||||||||
| (3) Customer deposits excluded brokered deposits. | ||||||||||||||||||||||||||||||||||||
| First Security Group, Inc. and Subsidiary | |||||||||||||||||||||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||||||||||||||||||||
| Non-GAAP Reconciliation Table | |||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||
| 3rd Quarter | 2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | Year-to-Date | Year-to-date | |||||||||||||||||||||||||||
| 2013 | 2013 | 2013 | 2012 | 2012 | Sept. 30, 2013 | Sept. 30, 2012 | |||||||||||||||||||||||||||
| (in thousands, except per share amounts and full-time equivalent employees) | |||||||||||||||||||||||||||||||||
| Total stockholders' equity | $ | 83,388 | $ | 86,654 | $ | 20,994 | $ | 29,110 | $ | 44,722 | $ | 83,388 | $ | 44,722 | |||||||||||||||||||
| Effect of preferred stock | — | — | (32,660 | ) | (32,549 | ) | (32,439 | ) | — | (32,439 | ) | ||||||||||||||||||||||
| Common stockholders' equity | $ | 83,388 | $ | 86,654 | $ | (11,666 | ) | $ | (3,439 | ) | $ | 12,283 | $ | 83,388 | $ | 12,283 | |||||||||||||||||
| Average total stockholders' equity | $ | 79,382 | $ | 92,658 | $ | 27,184 | $ | 42,584 | $ | 52,181 | $ | 65,659 | $ | 59,910 | |||||||||||||||||||
| Effect of average preferred stock | — | (3,589 | ) | (32,586 | ) | (32,476 | ) | (32,368 | ) | (11,939 | ) | (32,262 | ) | ||||||||||||||||||||
| Average common stockholders' equity | $ | 79,382 | $ | 89,069 | $ | (5,402 | ) | $ | 10,108 | $ | 19,813 | $ | 53,720 | $ | 27,648 | ||||||||||||||||||
| First Security Group, Inc. and Subsidiary | ||||||||||||||||
| Consolidated Balance Sheets | ||||||||||||||||
|
September 30, |
December 31, |
September 30, |
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|
(in thousands) |
(unaudited) | (unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||||
| Cash and Due from Banks | $ | 10,357 | $ | 12,806 | $ | 10,204 | ||||||||||
| Interest Bearing Deposits in Banks | 59,943 | 159,665 | 201,631 | |||||||||||||
| Cash and Cash Equivalents | 70,300 | 172,471 | 211,835 | |||||||||||||
| Securities Available-for-Sale | 207,009 | 254,057 | 257,263 | |||||||||||||
| Securities Held-to-Maturity, at amortized cost (fair value - $130,170) | 129,164 | — | — | |||||||||||||
| Loans Held for Sale | 1,661 | 25,920 | 3,857 | |||||||||||||
| Loans | 534,627 | 541,130 | 573,365 | |||||||||||||
| Less: Allowance for Loan and Lease Losses | 10,700 | 13,800 | 17,490 | |||||||||||||
| Net Loans | 523,927 | 527,330 | 555,875 | |||||||||||||
| Premises and Equipment, net | 28,810 | 29,304 | 29,540 | |||||||||||||
| Bank Owned Life Insurance | 28,155 | 27,576 | 27,364 | |||||||||||||
| Intangible Assets, net | 388 | 600 | 677 | |||||||||||||
| Other Real Estate Owned | 8,662 | 13,441 | 15,803 | |||||||||||||
| Other Assets | 13,779 | 12,856 | 15,256 | |||||||||||||
| TOTAL ASSETS | $ | 1,011,855 | $ | 1,063,555 | $ | 1,117,470 | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
| LIABILITIES | ||||||||||||||||
| Deposits | ||||||||||||||||
| Noninterest Bearing Demand | $ | 147,865 | $ | 141,400 | $ | 158,967 | ||||||||||
| Interest Bearing Demand | 92,108 | 86,575 | 68,387 | |||||||||||||
| Savings and Money Market Accounts | 215,293 | 184,597 | 186,182 | |||||||||||||
| Certificates of Deposit less than $100 thousand | 195,129 | 228,144 | 232,558 | |||||||||||||
| Certificates of Deposit of $100 thousand or more | 170,466 | 201,873 | 204,789 | |||||||||||||
| Brokered Deposits | 88,987 | 165,477 | 193,248 | |||||||||||||
| Total Deposits | 909,848 | 1,008,066 | 1,044,131 | |||||||||||||
| Federal Funds Purchased and Securities Sold under Agreements to Repurchase | 12,657 | 12,481 | 14,691 | |||||||||||||
| Security Deposits | 14 | 58 | 88 | |||||||||||||
| Other Borrowings | — | — | — | |||||||||||||
| Other Liabilities | 5,948 | 13,840 | 13,838 | |||||||||||||
| Total Liabilities | 928,467 | 1,034,445 | 1,072,748 | |||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||
| Preferred Stock – no par value – 10,000,000 shares authorized; no shares issued as of September 30, 2013; 33,000 issued as of December 31, 2012 and September 30, 2012; Liquidation value of $0 at September 30, 2013, $38,156 as of December 31, 2012 and $37,744 as of September 30, 2012 | — | 32,549 | 32,439 | |||||||||||||
| Common Stock – $.01 par value – 150,000,000 shares authorized; 66,602,601 shares issued as of September 30, 2013, 1,772,342 issued as of December 31, 2012, and 1,772,342 issued as of September 30, 2012 | 764 | 115 | 115 | |||||||||||||
| Paid-In Surplus | 196,059 | 106,531 | 107,146 | |||||||||||||
| Common Stock Warrants | — | 2,006 | 2,006 | |||||||||||||
| Unallocated ESOP Shares | — | — | (759 | ) | ||||||||||||
| Accumulated Deficit | (103,395 | ) | (115,391 | ) | (99,291 | ) | ||||||||||
| Accumulated Other Comprehensive (Loss) Income | (10,040 | ) | 3,300 | 3,066 | ||||||||||||
| Total Shareholders’ Equity | 83,388 | 29,110 | 44,722 | |||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,011,855 | $ | 1,063,555 | $ | 1,117,470 | ||||||||||
| First Security Group, Inc. and Subsidiary | |||||||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| (in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||
| Loans, including fees | $ | 6,461 | $ | 7,722 | $ | 19,537 | $ | 24,289 | |||||||||||||
| Investment Securities – taxable | 1,321 | 904 | 3,143 | 2,788 | |||||||||||||||||
| Investment Securities – non-taxable | 312 | 227 | 749 | 780 | |||||||||||||||||
| Other | 77 | 121 | 338 | 387 | |||||||||||||||||
| Total Interest Income | 8,171 | 8,974 | 23,767 | 28,244 | |||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||
| Interest Bearing Demand Deposits | 62 | 52 | 213 | 128 | |||||||||||||||||
| Savings Deposits and Money Market Accounts | 188 | 247 | 628 | 831 | |||||||||||||||||
| Certificates of Deposit of less than $100 thousand | 466 | 657 | 1,551 | 2,063 | |||||||||||||||||
| Certificates of Deposit of $100 thousand or more | 475 | 631 | 1,558 | 1,948 | |||||||||||||||||
| Brokered Deposits | 795 | 1,420 | 2,873 | 4,538 | |||||||||||||||||
| Other | 20 | 118 | 51 | 347 | |||||||||||||||||
| Total Interest Expense | 2,006 | 3,125 | 6,874 | 9,855 | |||||||||||||||||
| NET INTEREST INCOME | 6,165 | 5,849 | 16,893 | 18,389 | |||||||||||||||||
| (Credit) Provision for Loan and Lease Losses | (1,632 | ) | 4,543 | (1,780 | ) | 10,492 | |||||||||||||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES | 7,797 | 1,306 | 18,673 | 7,897 | |||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||
|
Service Charges on Deposit Accounts |
798 | 725 | 2,298 | 2,160 | |||||||||||||||||
| Mortgage Banking Income | 420 | 249 | 927 | 718 | |||||||||||||||||
| Gain on Sales of Securities Available-for-Sale | — | 143 | 154 | 144 | |||||||||||||||||
| Other | 1,296 | 1,577 | 3,876 | 3,967 | |||||||||||||||||
| Total Noninterest Income | 2,514 | 2,694 | 7,255 | 6,989 | |||||||||||||||||
| NONINTEREST EXPENSES | |||||||||||||||||||||
| Salaries and Employee Benefits | 5,807 | 5,275 | 17,081 | 14,911 | |||||||||||||||||
| Expense on Premises and Fixed Assets, net of rental income | 1,546 | 1,450 | 4,302 | 4,332 | |||||||||||||||||
| Other | 4,066 | 6,056 | 16,989 | 18,037 | |||||||||||||||||
| Total Noninterest Expenses | 11,419 | 12,781 | 38,372 | 37,280 | |||||||||||||||||
| LOSS BEFORE INCOME TAX PROVISION (BENEFIT) | (1,108 | ) | (8,781 | ) | (12,444 | ) | (22,394 | ) | |||||||||||||
| Income Tax Provision (Benefit) | 322 | 108 | 358 | (402 | ) | ||||||||||||||||
| NET LOSS | (1,430 | ) | (8,889 | ) | (12,802 | ) | (21,992 | ) | |||||||||||||
| Preferred Stock Dividends | — | (413 | ) | (929 | ) | (1,238 | ) | ||||||||||||||
| Accretion on Preferred Stock Discount | — | (108 | ) | (452 | ) | (318 | ) | ||||||||||||||
| Effect of Exchange of Preferred Stock to Common Stock | — | — | 26,179 | — | |||||||||||||||||
| NET (LOSS ALLOCATED) INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | (1,430 | ) | $ | (9,410 | ) | $ | 11,996 | $ | (23,548 | ) | ||||||||||
| NET INCOME (LOSS) PER SHARE: | |||||||||||||||||||||
| Net Income (Loss) Per Share – Basic | $ | (0.02 | ) | $ | (5.79 | ) | $ | 0.30 | $ | (14.54 | ) | ||||||||||
| Net Income (Loss) Per Share – Diluted | $ | (0.02 | ) | $ | (5.79 | ) | $ | 0.30 | $ | (14.54 | ) | ||||||||||
| Dividends Declared Per Common Share | $ | — | $ | — | $ | — | $ | — | |||||||||||||
